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THE SELLER’S OBLIGATION TO DELIVER THE GOODS UNDER A CONTRACT OF SALE OF GOODS

By

MARWAH SAADI SALEH

Thesis Submitted to the Ghazali Shafie Graduate School of Government, Universiti Utara Malaysia

In Fulfilment of the Requirement for Master of Human Resource Law May 2014

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Permission to Use

In presenting this thesis in partial fulfilment of the requirements for a postgraduate degree from University Utara Malaysia, I agree that the university library may make it freely available for inspection. I further agree that permission for copying of this thesis in any manner, in whole or in part, for scholarly purpose may be granted by my supervisor or, in her absence, by the Dean of College of law Ghazali Shafie Graduate School of Government (GSGSG), UUM COLGIS. It is understood that any copying or publication or use of this thesis or parts thereof for financial gain shall be given to me and the University Utara Malaysia for any scholarly use which may be made of any material from my thesis.

Request for permission to copy or to make other use of materials in this thesis, in whole or in part should be addressed to:

Dean of Ghazali Shafie Graduate School of Government (GSGSG) Collage of Law, Government, and International Studies

Universiti Utara Malaysia

06010 UUM Sintok, Kedah DarulAman Malaysia

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Abstrak

Kontrak jualan mempunyai peranan yang sangat penting dalam urusniaga jualan dan hubungan undang-undang mereka adalah pelbagai dalam sistem undang-undang yang berbeza. Kewajipan untuk menyampaikan ialah satu tugas yang paling penting yang dikenakan oleh undang-undang kepada peniaga, dan komitmen yang sepadan oleh pembeli adalah dengan membayar harga kepada penjual. Sebelum peniaga menyerahkan barangan, pembeli tidak mempunyai kuasa untuk mengikut pemilik barangan tersebut. Banyak negara maju dan membangun yang berminat dalam bidang penjualan kontrak barangan dan sewajarnya , mereka telah dijelaskan tentang tindakan khas untuk mengawal selia kontrak pada tahap dalaman dan antarabangsa. Di Negara Iraq, penjualan kontrak barangan telah dikawalselia melalui perubahan dalam CISG sejak tahun 1991 dan tambahan lagi, undang-undang yang berkaitan di negara ini masih di tahap membangun. Objektif kajian ini adalah untuk mengkaji kepentingan elemen penyampaian dalam jualan kontrak barangan pada peringkat antarabangsa dan ia juga bertujuan untuk memeriksa kewajipan peniaga berikutan pelanggaran dalam kontrak jualan barangan. Untuk menjalankan kajian ini, pendekatan undang-undang doktrin diterima sebagai reka bentuk penyelidikan. Berikutan perkembangan ini, pengkaji telah merujuk kepada sumber data kedua, iaitu buku-buku ujian, artikel jurnal, laporan kerajaan dan peruntukan undang-undang dan peraturan yang berkaitan dengan negara-negara terpilih . Semua data yang dikumpul telah dianalisis secara deskriptif dan mendalam. Kajian ini mendapati bahawa undang-undang Iraq dalam penjualan kontrak barangan perlu mengamalkan prinsip-prinsip umum yang boleh diterima seperti yang dipersetujui di peringkat antarabangsa. Beberapa penambahbaikan terhadap undang-undang perlu dilaksanakan untuk menjadikannya lebih menyeluruh dan mampu mengelakkan pertikaian.

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Abstract

Sale contracts have a very important role in sale transactions, and their legal relations vary in different legal systems. The obligation to deliver is one of the most important obligations imposed by law on the seller, and the corresponding commitment by the buyer is to pay the price to the seller. Until sellers deliver the goods, buyers do not have authority pursuant to the owner. Many developed and developing countries are interested in the area of sale of goods contracts and accordingly, they have specified special acts to regulate the contracts at internal and international levels. In Iraq, sale of good contracts have been regulated through the ratification of the CISG since 1991; yet, the country’s relevant law is still under developed. The objective of this study is to study the importance of the delivery element in a sale of goods contract at international level; it also intends to examine the seller’s liability following a breach in a contract of sale of goods. To carry out the study, a doctrinal legal approach was adopted as the research design. On this account, the researcher has mainly referred to secondary data, namely test books, journal articles, government reports and the provisions of the relevant laws and legislations of selected countries. All the collected data were analyzed descriptively and critically. This study found that the Iraqi legislation on sale of goods contracts should apply the common acceptable principles as agreed internationally. Some improvements to the law need to be implemented in order to make it more comprehensive and capable of avoiding disputes.

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Acknowledgement

All praise goes to Allah the Almighty

It is a great pleasure to thank everyone who helped me write my thesis successfully: Foremost, I would like to express my sincere gratitude to my supervisor Dr, Khadijah Mohamed for her continuous support during me study period, for his patience, motivation, enthusiasm, and immense knowledge. Her guidance helped me in all the time of research and writing of this thesis. I could not have imagined having a better advisor and mentor for master study.

Most importantly, I am truly thankful and would like to express my sincere gratitude to my beloved family members, in particular my parents who always being there for me, supported and encouraged me. In addition, I would like to thank my husband’s family specially, my mother in law and father in law for their supporting, generally to all his family for their encouragement. Undoubtedly, this attributed their warm-hearted love, support, and encouragement this study would have never been a completed too.

I am sincere and grateful to my great husband for his emotional support, camaraderie, and the caring he grunted.

In addition, I am also grateful to lecturers at Universiti Utara Malaysia, who gave me a lot of knowledge and cultivated my interest in human resource law. I am also indebted to the staff of College of Law, Government and International Studies for all their assistance.

Lastly, I would like to extend my thanks to all my dear friends and whoever taught me even a single word in my life.

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Table of Contents

Certificate of Thesis Work ... i

Permission To Use ... ii

Abstrak ... iii

Abstract ... ii

Acknowledgement... iv

Table of Contents ... v

List of Abbreviations... viii

CHAPTER ONE ... 1

INTRODUCTION ... 1

1.1 Introduction ... 1

1.1 Research Background ... 1

1.1 Historical Background of Iraqi‘s Legal System ... 8

1.4 Problem Statement ... 12

1.1 Research Questions ... 15

1.1 Research objectives ... 15

1.1 Research Significance ... 16

1.1 Scope and limitation of study ... 16

CHAPTER TWO ... 19

LITERATURE REVIEW ... 19

1.1 Introduction ... 19

1.1 Definitions of Key Terms ... 20

1.1 The United Nations Convention on Contracts for the International Sale of Goods (CISG) 1980 ... 22

1.1.1 The Obligation of the Seller to Deliver the Goods According to CISG 24 1.2 Delivery under Malaysian SOGA 1957 ... 31

1.1 Situation of Iraqi Bossiness laws ... 34

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1.1.1 Iraqi Civil Code No.40 of 1951 ... 35

1.1.1 The Iraqi Commercial Code, Law No. 30 (1984) ... 36

2.6 Relevant countries that have ratified the CISG ... 37

CHAPTER THREE ... 40 RESEARCH METHODOLOGY ... 40 1.1 Introduction ... 40 1.1 Research Design ... 40 1.1 Data Collection ... 42 CHAPTER FOUR ... 44

DATA ANALYSIS AND FINDINGS ... 44

2.1 Introduction ... 44

4.2 Delivery ... 44

4.2.1 General Overview ... 45

4.2.2 The Meaning of “Delivery” ... 46

4.2.3 Place of Delivery ... 52

4.2.3.1 Supplementary Obligations of Arrangement for Shipment ... 54

4.2.3.2 Delivery not Involving Carriage of Goods ... 57

4.2.3.3 Goods at A Particular Place ... 57

4.2.4 Time of Delivery ... 58

4.2.4.1 Delivery at a Specific Time ... 59

4.2.4.2 Delivery in a Specific Period of Time ... 61

4.2.4.3 Delivery in a Reasonable Time ... 62

4.2.5 Handing over of Document ... 63

4.2.5.1 Documents Relating to the Goods ... 65

4.3 Liability of Seller in Breach of Delivery ... 66

4.3.1 Specific Performance... 70

4.3.1.1 Requirements for Substitute Goods and Repair ... 73

4.3.1.2 Buyer's Additional Period for Performance ... 76

4.3.1.3 Seller's Additional Period for Cure ... 78

4.3.2 Buyer's Right to Avoid the Contract ... 80

4.3.2.1 Fundamental Breach ... 83

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4.3.2.3 Notice of avoidance ... 86

4.3.2.4 Time Limits for Avoidance ... 87

4.3.3 Reduction in Price ... 89

CHAPTER FIVE ... 94

DISCUSSION, SUMMARY AND RECOMMENDATIONS ... 94

5.1 Introduction ... 94

5.2 Discussion ... 94

5.2.1 Findings of the first Research Question ... 95

5.2.2 Findings of the Second Research Question ... 96

5.3 Conclusion ... 98

5.4 Recommendations for Future Work ... 100

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List of Abbreviations

UNIDROIT ………. International Institute for the Unification of Private Law in Rome

SOGA 1979 ………. English Sale Of Goods Act 1979 SOGA 1957 ………. Malaysian Sale Of Goods Act 1957

ULIS 1964 ………. Uniform Law on International Sale of Goods 1964

ULF ………. Uniform Law on the Formation of

Contracts for the International Sale of Goods

UNCITRAL ………. United Nations Commission on

International Trade Law

CISG ………. United Nations Convention on Contracts

for the International Sale of Goods

NIl ………. National Investment Law 2006

ICC ………. Iraqi Civil Code NO.40 of 1951

INCOTERMS ………. International Commerce Terms

CLOUT ………. Case Law on UNCITRAL Texts

CLJ ………. Current Law Journal

CA ………. Contract Act 1950

CIF ………. Cost, Insurance and Freight

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CHAPTER ONE

INTRODUCTION

1.1Introduction

This study will discuss the seller’s obligation to deliver the goods in the sale of goods contracts according to the provisions of the Vienna Convention 1980 and Malaysian law. In this chapter, the researcher discussed the background of the study, by highlighting the importance of the seller’s obligation in delivering the goods in a contract of sale of goods. The research then highlights the issues involved with the failure of seller to deliver the goods. It later mentions about the research objective, i.e. the aims to be achieved by having this study. Under this part also, research questions and significance of the study are laid down. Moreover, research methodology is presented whereby the approach used is the doctrinal research. At the end of this chapter, a summary of chapter is given.

1.2Research Background

Businesses which buy or sell goods at international level often face unique legal, financial, cultural and geographical issues that are governed by the contract between the buyer and the seller. The sale contract particularly, has a very important role and its legal relations vary in different legal systems. A vast number of rules are earmarked to sale contracts and this diversity has led to the ratification of different Acts, which in the absence of uniform rules, will cause the contracting parties to have different problems in the area of international trade. The ’Sale of Goods’

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